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Question 271 - IIA-CIA-Part2 discussion

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An internal auditor is analyzing sates records and is concerned whether a transaction is recorded in the coned period. The accounting manager explains that the external auditor approved the records and produces an email from the external audit team leader. How should tie internal auditor respond?

A.
Ask the external auditor to review the same transaction again as an independent third party
Answers
A.
Ask the external auditor to review the same transaction again as an independent third party
B.
Consult account accounting principles, standards, and relevant guidelines in regard to timing of the entry
Answers
B.
Consult account accounting principles, standards, and relevant guidelines in regard to timing of the entry
C.
Interview the chief financial officer and obtain her opinion on how the transactions should be recorded
Answers
C.
Interview the chief financial officer and obtain her opinion on how the transactions should be recorded
D.
Compare the recording of this transaction to now similar ones were executed last year
Answers
D.
Compare the recording of this transaction to now similar ones were executed last year
Suggested answer: B

Explanation:

When concerned about whether a transaction is recorded in the correct period, the internal auditor should consult accounting principles, standards, and relevant guidelines to determine the appropriate timing of the entry. External auditor approval does not negate the internal auditor's responsibility to ensure that the transaction complies with established accounting standards and principles. Consulting the relevant guidelines provides an objective basis for assessing the accuracy of the transaction's recording.

The Institute of Internal Auditors (IIA) Standard 1220 -- Due Professional Care: 'Internal auditors must apply the care and skill expected of a reasonably prudent and competent internal auditor.'

Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS) depending on the applicable framework.

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asked 18/09/2024
Phil Horikawa
38 questions
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